MEG reports low SOR in SAGD pilot

MEG Energy, Calgary, has achieved a steam-oil ratio of 1:3, which it calls “industry-leading,” in a pilot project at its Christina Lake thermal oil sands project in Alberta.

In its third-quarter financial report MEG said it is expanding application of the technology, called enhanced modified steam and gas push (eMSAGP).

Since full implementation of the pilot in January 2012, the technology by the fourth quarter had lowered steam rates by 30% without decreasing the production trend, the company reported.

In the pilot, MEG drilled two infill wells and injected noncondensable gas with steam between three steam-assisted gravity drainage well pairs in early stages of production. The technique is normally applied in late phases of SAGD production.

MEG said early results from new wells using eMSAGP have shown similar improvements, “driving expectations of further efficiencies and incremental production increases.”

It said it will initiate eMSAGP in an additional six wells in the current quarter.

It plans to begin steaming the 35,000-b/d second stage of Christina Lake’s second phase in the third quarter. The company projects total Christina Lake production this year at 32,000-35,000 b/d.

MEG reported a first-quarter loss of $71.3 million (Can.), compared to a $53.4 million profit in the same period of 2012, attributing the loss mainly to unrealized foreign exchange effects related to a weakening of the Canadian dollar against the US dollar and lower cash flows from operations due to lower price realizations.

Because of a widening of the discount of bitumen blend against West Texas Intermediate, its bitumen realization fell to $30.04/bbl in the first quarter this year from $50.15/bbl in the first quarter of 2012.